Asian Stocks Extend Four-Week Rally on U.S. Capital Goods; Canon Advances

Asian stocks rose, extending a four-week rally, after a government report showed U.S. demand for capital goods increased more than expected.

Komatsu Ltd., the world’s second-biggest maker of construction equipment, jumped 2.4 percent in Tokyo, while Canon Inc., a camera maker that gets 28 percent of its sales in the Americas, advanced 2 percent. Alumina Ltd. climbed 2.2 percent in Sydney as metal prices gained on Sept. 24.

“It’s positive for the whole global economy that demand for capital investment in the private sector is strong,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “Demand should rise further. Capital investment is still at 80 percent of the peak.”

The MSCI Asia Pacific Index gained 0.5 percent to 126.19 as of 9:34 a.m. in Tokyo. Almost four stocks advanced for each one that declined in the gauge, which is set for its biggest monthly advance since July, having climbed 8.3 percent this month.

Japan’s Nikkei 225 Stock Average rose 1 percent and South Korea’s Kospi index gained 0.5 percent. Australia’s S&P/ASX 200 Index jumped 1.4 percent today. New Zealand’s NZX 50 Index climbed 0.7 percent.

Futures on the Standard & Poor’s 500 Index increased 0.4 percent today. The index surged 2.1 percent on Sept. 24 to the highest level since May 13 as the capital-goods report and better-than-estimated earnings at Nike Inc. bolstered confidence in the world’s largest economy.

U.S. Capital Orders

Orders for U.S. capital equipment rebounded 4.1 percent in August from a 5.3 percent decline in July, figures from the Commerce Department showed on Sept. 24 in Washington. The median forecasts of 11 economists surveyed by Bloomberg was for an increase of 3 percent.

The MSCI Asia Pacific Index has increased 4.2 percent in 2010, compared with gains of 3 percent by the S&P 500 and 4 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.2 times estimated earnings on average, compared with 13.8 times for the S&P and 12 times for the Stoxx.

Material producers accounted for 19 percent of the MSCI Asia Pacific Index’s advance. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum climbed 0.7 percent on Sept. 24 to its highest level since April, while crude-oil futures rose 1.7 percent to $76.49 a barrel in New York, the biggest increase in two weeks.